News

Etsy sellers tend to be young, female and educated

July 28, 2015 10:54 AM

Like most entrepreneurs, sellers on Etsy.com, a handcrafted goods marketplace, are self-reliant, motivated and eager to run their own businesses.

However, unlike some entrepreneurs, they typically don’t borrow money to start—or grow—their businesses: Of the 65% who required capital to start their businesses, 83% relied on personal savings, and only 1% obtained a loan. And just 12% of Etsy sellers have help running their companies; for that matter only 5% have paid help.

Etsy sellers are a unique breed in terms of business owners and tend to see themselves as smaller than small businesses, what Etsy terms “micro-businesses.” These sellers are mostly female, many are parents with children at home and 17% have annual household income under $25,000. Nearly half (45%) had never sold their goods until they sold them on Etsy, according to the results of a recent survey the marketplace conducted online with more than 4,000 U.S. Etsy sellers.

Etsy’s report, titled “Building an Etsy economy: The new face of creative entrepreneurship,” notes its sellers “represent a new approach to business, where autonomy and independence matter just as much as, if not more than, the bottom line.” Many want to keep their business at a size they can manage themselves, with 69% saying they don’t plan to employ any more people and 65% saying they would not consider taking out a loan to expand their business.

Conversely, 90% of Etsy sellers want to grow their business, and 54% would consider selling goods wholesale or on consignment. 56% would consider scaling their business operations, for example by purchasing new equipment (30%), using outside manufacturing (20%), or renting or acquiring additional space (38%). Yet they wish to grow without damaging the environment: Of those who want to grow their business, 75% agree that being sustainable and responsible is important to them.

Key demographics among Etsy sellers revealed by the survey include:

Median age (years): 39

Gender (% female): 86%

Education (% with college degree): 56%

Median household income: $56,180

Live in a rural area: 39%

The majority of Etsy sellers (51%) work independently, meaning their creative business is their sole occupation, they are self-employed in other ways, they work part time or they are temporary workers. Etsy sellers also derive income from multiple sources. The majority—57%—have a job outside of their creative business, and only 36% of all Etsy sellers have full-time employment.

In the report, Etsy, No. 24 Internet Retailer 2015 Top 500 Guide, urges government to expand manufacturing support services to help small-batch manufacturers source materials, update designs and locate production partners.

The survey was conducted from Nov. 24, 2014–Jan. 5, 2015 among sellers who had sold at least one item in the previous 12 months. Sellers were randomly contacted. The survey was developed by Etsy and Kantar Media, and the research was conducted by Kantar Media.

Etsy launched an IPO in April. In its May Q1 earnings report noted that consumers purchased $532 million on its site during the quarter, a 28% year-over-year increase. About 58% of site visits and 41% of sales are mobile. Despite online sales growth, net loss for the first quarter was $36.6 million, compared with a $500,000 net loss in the first quarter of 2014.

Etsy says the big increase in net loss stemmed from changes in its corporate structure that took effect Jan. 1, 2015. Those changes resulted in two noncash accounting charges: a $10.5 million provision for taxes and a currency exchange loss of $20.9 million, largely due to intercompany debt incurred related to the structure.